Can You Get A Mortgage Loan For A Home That Sits On Leased Land?
There’s no denying that there are many homes in 2016 that sit on leased land including: manufactured homes, mobile homes and some condominiums but the question is can you get a mortgage loan on a home that sits on leased land? The answer to this question typically depends on who you ask but it’s been our experience that the answer is both no and yes.
Why Most Lenders Will Say No
The primary reason why may be unable to get a mortgage for a home that sits on leased land is because this type of mortgage loan is typically riskier than other mortgage loans because, if the owner of the land decides to tear down all of the buildings on their property within 25 years to build one large building or development the mortgage loan would still have to be paid back but there would not be a home or collateral to secure that mortgage loan.
Other reasons why lenders and some Realtors® are against their clients buying homes on leased land include:
Higher HOA Fees – Homeowners Association Fees on leased land can run up to $900 or more per month while the typical HOA fee on a home that’s not on leased land may average $250 per month.
Length Of Lease – Your lease could run out before your mortgage is paid off and if the owner doesn’t want to renew the lease you would lose all rights and improvements that you made to the property over the years.
Hope Is Available
Even though most lenders will say no to approving mortgage loans for homes that are on leased land, the reality is that there are some lenders out there who specialize in this type of lending and at Fred Sed Realty we can connect you with the right lender for your situation.
To learn more about the mortgage lenders we work with who specialize on approving mortgage loans for homes that sit on leased land contact us today at (800) 921-9231 or connect with us online.